And I think if you talk to people across the company, I think you’ll find a lot of enthusiasm about what IFF is doing and what more we can do going forward. Specifically on scent, I think scent has been a unit that has stayed focused largely on customers, that has brought a lot of innovation to customers. I’ve spent a lot of time with the perfumers in this company. We’ve got world class perfumers and I just am so proud to be part of this company with such great perfumers that our customers value. I’ve spent time with CEO’s of leading, leading CPG companies that have named our perfumers by name because they’re so important to their success. And so making sure that we’re bringing not only our perfumers but the whole team around the perfumers to help co-create great new fragrances and fine fragrances or great new consumer products, whether they’re shampoos or detergents, laundry detergents or dishwasher detergents or floor cleaners or body wash, whatever it is, the scent, I’ve learned, is such a critical part of the success of the consumer product and our great perfumers and the teams around them bringing great scent technology and great formulations to help the customers develop leading consumer products has really been what’s driven the growth.
So I expect under Ana’s leadership and with the super team that she’s got, I expect that continued strong performance to continue.
Operator: Thank you. Our next question comes from the line of Salvator Tiano with Bank of America. Salvatore, your line is now open.
Salvator Tiano: Yes, thank you very much. If I remember correctly, talked about $150 million productivity gains for the year. So can you talk a little bit? Can you quantify what was the benefit in Q1? What do you expect for the rest of the year? And given obviously the strong gains in the first quarter, is this number upside for the rest of the year?
Erik Fyrwald: A good question, Salvatore. We are trending at around $200 million full year in terms of productivity and hence some of our, our commentary about guiding towards the higher range of our EBITDA guide. And that’s about $50 million per quarter. So it’s fairly ratable in terms of kind of the achievement. I would note, as we said in previous calls, we have made tremendous progress with our operations and procurement leadership teams in really driving a very disciplined approach, taking cost out everything from ski rationalization to literally looking at plant by plant in terms of best practices. And behind that, and by the way, there’s plenty of additional opportunities. As I mentioned, we’re taking a zero paced approach to our ingredients platform, which will provide additional opportunities.
And behind that, we’ve really been looking at opportunities within RSA, that have been focused on leveraging our global shared services, really focusing on our indirect spend. So getting every dollar out we need and then continuing to advance technology as a way to basically automate, eliminate work. So that piece of it is actually picking up speed as well. So we feel very good about $200 million and I would suggest as we look out into the future, we’re going to continue to deliver very strong productivity numbers. Thanks for the question.
Operator: Thank you. Our next question comes from the line of Lisa De Neve with Morgan Stanley. Lisa, your line is now open.
Lisa De Neve: Good morning. Thank you for taking my question. Congratulations on the strong first quarter. My first question, so with the announcement of the Pharma division, which is expected to complete in the first half of next year, can you just share where you see potential scope for optimizing your balance sheet position and maybe where you see some debt that could be reduced or be up for redemption or that may not require any refinancing? And then I’m going to nikon a second question. So during the presentation, you mentioned that your finance and HR departments, amongst others, are now directly feeding into your divisions. Can you shed some light on their compensation structure of the variable pay they may or may not receive and what key KPI’s they have to deliver on this? Thank you.
Glenn Richter: Sure. Hey, Lisa. Good morning. This is Glenn. So we’re in the early innings of deciding sort of our liability management strategy. As you know, we will bring in circa net proceeds, $2.4 billion from Pharma. Coincidentally, we have maturities cumulatively for ’25 and ’26 that are $2.4 billion. But we’re actually taking a more holistic look, and we’re actually going to be balancing the trade-off between interest cost savings, notional debt repayment. So how do we think about basically bringing in some of the cheaper debt as well as refinancing risk? So we’ll think about bringing some towers down as part of that. So there’ll be more to come as we get closer to finalizing the close of the deal. But we are sort of thinking about not just the immediate maturities, but how to optimize the structure going forward. So with that, Eric, I’m happy to take the next question. You want to take the next question?
Erik Fyrwald: Yes. So, on the functions feeding into the business units, reporting into the business units, it’s clearly being done so that the business units can drive their performance and there will be no changes to the 2024 plan because, because everybody’s set and clear about it and we’re not making changes. But effective in 2025, those functions that we’re reporting corporately, that we’ll be reporting into the business units, will be incentivized on the business unit performance as a large part of their incentive. They’ll also, of course, continue to have a corporate element to encourage overall corporate performance and collaboration across business units. And the more senior level the people are, the more their corporate component.
But clearly what we want to drive is business unit alignment and everybody on that business team driving that business unit’s performance, but also collaborating to enhance their business unit’s performance and the total company performance. I would also say that they’ll continue to be corporate functional leadership that ensure that we’re doing functional best practices across the business units and that each of the functional people have great career opportunities across the company. So it will be a combination, but clearly, each business unit is going to be highly incentive to drive the performance of that business with collaboration that enhances their business performance and the business performance of the other businesses.
Operator: Our next question comes from the line of Mark Astrachan with Stifel. Mark, your line is now open.
Mark Astrachan: Yeah, thanks and good morning, everybody. Two clarifications and a question. So it sounds like there was a lot of benefit in scent volumes in the quarter. I guess that partly explains the big EBITDA number and growth rate on a year-on-year basis. So is it fair to say that that specifically the scent EBITDA growth will normalize as we head through the year? And I guess broader picture, same thing on the total business. And if you could maybe tell us how much you think the 1Q volume growth had to do with channel refill from the reversal of the destocking and how much of it is really what your customers are ordering from you that would be helpful. Thank you.
